Daily Archives: January 27, 2020

The Trump administrations unexpected review of potential impacts of offshore wind-energy projects could be published early this year,but it remains unclear whether publication will clear a logjam that has stalled one of the countrys first large-scale projects, and the dozen to follow.

Some who have been expecting the federal government to finalize additional areas off Long Island to be auctioned for lease say there are concerns the delays could stall the states ambitious goals for offshore wind.

I know there is concern about it in New York because the governor has announced the next gigawatt of offshore wind to be put out to bid sometime this year, said Gordian Raacke, executive director of Renewable Energy Long Island, an green-energy group in East Hampton.

Last year, when the Bureau of Ocean Energy Management announced an analysis of offshore wind projects slated for construction in U.S. waters, Vineyard Wind, the first affected by it, was caught off guard. Vineyard Wind is proposinga project off the Massachusetts coast.

We would have liked for the project to have already begun construction, a Vineyard Wind spokesman said Wednesday. Were still analyzing when we can begin construction. We obviously cant do that without the final okay from BOEM.

Since the review began, President Donald Trump has doubled down on his criticism of wind energy, arguing that overseas manufacturing of the turbines causes tremendous amount of fumes spewing into the air, while they devalue proximate homes and kill birds. Theyre noisy, they kill the birds. You want to see a bird graveyard? Go under a windmill someday.

Department of the Interior officials have said the review is aimed at making sure they get offshore wind right the first time. BOEM acting director Walter Cruickshank this month said the review will serve as both a base and a model for future projects.

But the review appears to have slowed BOEMs schedule for other project milestones.

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A BOEMspokesman this week said the agency, part of the Department of the Interior, anticipates publishing the draft review early this year, before opening the draft report to public comments. What happens next is unclear.

The schedule for next steps will be posted on BOEMs website once its finalized, the agency spokesman said.

The supplemental review, the agency said, is intended to help better address potential conflicts with other ocean uses, such as commercial fishing and navigation.

Bill White, managing director of East Wind LLC., which has identified four sites for turbines off Long Island, said his hope that New York Bight sites would be auctioned off in the first quarter of 2020 has now been reset to the third or fourth quarter. Were looking at up to a year delay, which is disappointing, he said.

Wed like to compete in this area, he said. Were respectfully urging the federal government to act with all due haste.

Federal investment tax credits for new projects expired in 2020, and delays in approving project sites could limit the number of bidders, White said.

The New York State Energy Research and Development Authority, which is administering the bids for state energy contracts, said it has not received an update from BOEM on the planned new lease areas, or how the additional review will impact timing of new or announced projects. New York has awarded two, for up to 1,700 megawatts.

We are monitoring the situation closely and at this timewedo not have any reason to believe that this decision will delay development of New Yorks awarded offshore wind projects, a NYSERDA spokesman said.

NYSERDA early this year will ask the Public Service Commission for authorization to issue another 1,000 megawatt offshore wind solicitation by mid-2020,he said. In the past, NYSERDA has required that companies hold leases in order to bid.

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.

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Fed review of offshore wind projects raising concerns - Newsday

The Transocean Spitsbergen drilling rig. (Photo: Kenneth Engelsvold)

By The Maritime Executive 01-22-2020 07:01:43

The offshore supply chain started 2019 with the momentum of strong award levels of subsea equipment and FPSO hulls as well as improved floating rig rates. However, uneasiness has been building around the financial health of the offshore supply chain, and 2020 is likely to see a transformation, says Hoang Lu, from Wood Mackenzies upstream supply chain team.

Margins are razor thin and cost pressures continue to bear down. Meanwhile, the energy transition and threat of oversupply compete for attention. Ultimately, the offshore supply chain may take on a whole new look through 2020.

Wood Mackenzie forecasts that oil demand will peak in 2036, and the energy transition continues to accelerate towards that point.

Hybrid batteries have been a conduit of transformation, says Lu, noting Transoceans first-of-its-kind hybrid energy storage system deployed on the Spitsbergen semi-submersible in the North Sea. Transoceans patented hybrid power technology, developed in partnership with Aspin Kemp and Associates, reduces fuel consumption and increases a dynamically positioned rigs station-keeping reliability by capturing energy generated during normal rig operations that would otherwise be wasted, and storing it in batteries. This energy is then used to power the rigs thrusters.

Seadrill has made similar strides with the West Mira, another hybrid-powered floating rig employing a similar battery energy storage system. We expect any orders of newbuilds will require a renewable element, like Awilcos two green newbuilds currently on order.

Environmental, social and governance (ESG) criteria are increasingly important, and, as a result, are shaping offshore supply chain brands. TechnipFMC announced it will now be known as Technip Energies to highlight its ambition to be a global energy transition player. BHGE has become the Baker Hughes Company in a similar pivot towards energy-focused technology. Look out for much more of this rebranding in the near future, says Lu.

A lower margin supply chain is a reality for the near term, he said. Contractors will likely seek ways to broaden their scope of services to balance portfolios with the growth of renewables. Offshore wind projects are increasing in complexity, with larger developments being installed ever further offshore. This presents new opportunities for the supply chain. The next phase of offshore will ultimately be highly competitive; adapting early is vital.

The Majors

Meanwhile, the exploration sector heads into 2020 facing increasing pressure from the energy transition, says Alana Tischuk from Wood Mackenzie's global exploration team. While capital discipline and portfolio high-grading remain key, the shift to a low-carbon world poses a fundamental challenge, and this year is likely to show the sectors direction of travel in the years ahead.

Some investors are questioning the need to explore at all given the vast discovered resource base yet to be developed," says Tischuk. However, lower-carbon opportunities very often have lower costs and better economics. The challenge is to achieve success at scale. Companies will drill in the hope of finding better resources than those they already have lower cost barrels with a higher margin.

She said that while new opportunities exist, these large, valuable prospects lie mostly in new and emerging plays. The Majors are likely to remain prominent participants in high-impact exploration plays. National oil companies (NOCs), which are less exposed to investor concerns, may also be able to step up their exploration game.

Some companies may announce a strategic move towards acquisition-led growth or new energy businesses. Others are boosting their gas portfolios, viewing it as the fuel that will power the energy transition.

Tischuk said the move towards gas shows that exploration is not mutually exclusive with a low-carbon future. A diverse inventory of low-breakeven opportunities will be key as the energy transition unfolds. Those prospects with a clear route to commercialisation are likeliest to be drilled. One of the characteristics of successful, independent explorers is quickly exiting plays where they have limited early success, she said.

Traditionally, Majors have held their acreage to the end of term, but we expect them to adopt the swift turnaround approach of their smaller, nimbler cousins. Many of the areas the Majors have added are ultra-frontier, giant blocks, added for minimal commitments. This trend of fast turnover of new acreage may not become apparent in 2020, but instead materialise in the next three years or so.

Globally, Wood Mackenzie expects 500-600 wildcats to be completed during 2020, adding around 15 billion barrels of oil equivalent resources, in line with industry performance since 2014. Investment should hold steady at between $25 billion-$30 billion, similar to that spent in 2019. However, spend could slip by as much as five -15 percentas cost efficiencies continue.

Tischuk said the Americas will continue to see increased levels of exploration this year, particularly Brazil and Mexico, as will sub-Saharan Africa. Total has high hopes for South Africa after making the giant Brulpadda gas condensate discovery in 2019. The company plans to drill up to four exploration wells in the country in 2020, three targeting oil in the deepwater Outeniqua Basin. The company will also drill its giant (twobillion barrel) Venus oil prospect in deepwater Namibia. Shell and Kosmos are also among the companies hunting giants offshore Namibia in 2020.

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2020 Expected to Transform the Offshore Supply Chain - The Maritime Executive

All last year's 160 new turbines were installed in the North Sea, which now boasts 6,440MW of capacity, with a further 1,076MW in the Baltic Sea.

Another 16 turbines for 112MW were installed but not commissioned by the end of 2019, according to Deutsche WindGuard data.

German offshore wind generation reached 26TWh in 2019, up 25% on 2018, and accounted for 4% of overall German electricity generation and around 10% of the 243TWh from renewables last year.

But with more wind generation in the wholesale market, German offshore winds market value averaged just 34/MWh in 2019, nearly 7/MWh lower than in 2018.

Germany has now over-achieved its 2020, 6.5GW offshore wind target, and is close to the 7.7GW cap set on offshore wind to the end of this year.

On top of the 112MW that was not yet connected, nearly 17MW of pilot turbines are under construction while another 19.3MW of pilot projects have grid connection pledges. This would take Germanys offshore wind total to 7.66GW.

Offshore wind auctions in April 2017 and 2018 allocated 3.1GW of capacity for installation in 2021-2025, which means an average of just 620MW being added each year.

Permitting procedures for the projects is now under way and should lead to 10.8GW generating by the end of 2025.

Auctions for another 4.5GW for installation in 2026-2030 begin in 2021.

Five wind organisations BWE (Bundesverband Wind-Energie), BWO (Bundesverband derWindparkbetreiber Offshore), Stiftung Offshore-Windenergie, VDMA Power Systems and WAB called for lawmakers to swiftly allocate 2GW of idling German offshore transmission capacity to new projects in order to counter the upcoming lull in expansion, and to raise the 2030 offshore target to 20GW, from 15GW.

They said Germany needs to aim for 30-35GW in 2035 and over 50GW in 2050 to help fill the generation gap left by Germanys nuclear phase-out, completed in 2022, and the coal and lignite phase-out, scheduled for 2038.

But with zero-subsidy bids from the previous round of offshore tenders setting the highest price for all upcoming offshore tenders, policy changes are needed; offshore wind parameters like distance to shore set differing economic requirements, the groups urged.

They also argued for higher CO2 prices to encourage a market for green hydrogen generated from offshore wind and other renewables, stressing offshore wind energy should support the government's hydrogen strategy.

Germanys onshore transmission network expansion needs to continue apace to enable offshore generated electricity in the North and Baltic Seas to reach consumers throughout Germany, they said.

Further, Germanys electricity taxes and levies must be altered to promote sector coupling, where renewables-generated electricity surplus to immediate demand can be used economically for generating synthetic gas or chemicals or heat or used in transport or other uses, instead of being curtailed, the organisations pointed out.

Germany shoulders the EU Council Presidency in the second half of 2020 and should use these positions to push towards the European Union target of 450GW of offshore wind to 2050, as deemed necessary to ensure climate neutrality within the EU by that date, said the wind organisations.

Read more:

Is Germany's offshore sector about to hit the buffers too? - Windpower Monthly

Acoustic sensors on buoys and an undersea drone will be used to map out the movements of endangered northern right whales, marine mammals and fish around offshore wind energy sites, in a joint project with wind developer rsted and marine science institutions.

rstedon Wednesday announced the Ecosystem and Passive Acoustic Monitoring project is launching in cooperation with Rutgers University, the University of Rhode Island and Woods Hole Oceanographic Institution, in addition to the companys 2019 agreement to support Rutgers research related to wind energy development.

Rutgers will supply a Slocum electric glider, an undersea probe that can operate autonomously for weeks at a time, periodically surfacing to transmit its data back via satellite link. Now widely used in oceanography, the glider technology will be a first for rsted, one of the pioneer companies in European offshore wind.

Gliders generate forward motion using battery-powered ballast water pumps and lift from their wings. AUVAC image.

Findings from the study will be used to better protect the North Atlantic right whale during survey, construction and operation phases of their U.S. offshore wind farm portfolio, the company said in a statement. The ECO-PAM project will ensure the company can act to solve the global climate crisis, while preserving local ecosystems.

With only about 450 animals now surviving, northern right whales can be harmed in ship strikes and fishing gear entanglement, and NOAA is intently focused on protection. The risks were underlined this month when one of four newborn whale calves was struck and gravely injured by a vessel off Georgia.

The whales migrate past offshore energy sites leased by rstedand other developers, and the potential for them to be affected by construction and operation of turbine arrays is a concern for wind power advocates and critics alike.

The whales are already a consideration for designers and shipbuilders working on the first generation of crew transfer vessels for servicing turbines. NOAA rules for dynamic management areas shifting speed limit zones that track the whale movements limit vessels over 65 feet to 10 knots or less.

The main goal of the study is to understand the whales habitat, their numbers, distribution and seasonal movements within rsteds lease areas, from southern New England down to New Jersey and off the Delmarva coast.

Oceanographic data from the project could help with weather forecasting and severe storm prediction, the company says.

During the three-year project, two acoustic buoys deployed by WHOI and one from URI will collect data, with the institutions advancing localizing and detection methods.

The technology exists now to acoustically detect and track marine mammals such as the North Atlantic right whale with fixed and mobile systems and this project will demonstrate this technology, said James H. Miller, Professor of Ocean Engineering and Oceanography, University of Rhode Island.

Gliders can carry instrument packages and sensors in an internal bay or externally. Kirk Moore photo.

The Rutgers glider will operate for long missions in and around rsted lease areas off New Jersey. Along with supplying data for the whales study, the environmental variables collected on these glider missions will be fed directly into national data systems that provide vital ocean information for improving the prediction of marine-driven weather, such as coastal storms, said Joseph F. Brodie, director of atmospheric research at the Rutgers University Center for Ocean Observing Leadership.

The glider and buoys will carry acoustic receivers, and the signals will be shared with existing networks including the Mid-Atlantic Acoustic Telemetry Observation System. The system regularly tracks acoustic tags, or pingers, that ocean scientists use to monitor fish moving through the region.

Some of those movements include commercial fishing species, so the acoustic study could further that understanding, according to rsted. The company has a working relationship with the fishing advocacy coalition Responsible Offshore Development Alliance, agreeing to work cooperatively on research of mutual interest.

Our project will help to minimize the impact of wind farm construction and operation on whales so that both we and the whales can reap the long-term benefits of clean energy, said Mark Baumgartner, a senior scientist at Woods Hole.

Link:

Acoustic survey to study right whales, fish around offshore wind projects - WorkBoat

David Boggs, Energy Maritime Associates Pte Ltd.

As operators keep close watch on costs and spending, offshore activity levels are expected to increase at a measured pace. The floating production sector is clearly the brightest spot in the offshore industry today.

The market outlook continues to strengthen, making this the fourth year in a row that more than 50% of respondents expressed positive sentiment (somewhat confident to highly confident), according to EMAs annual Global Floating Production Industry Survey. The results show an increasing bifurcation, with the percentage of respondents who are highly confident rising from 23% last year to 31% this year. At the same time, the number of very pessimistic respondents doubled from 1% to 2%. The number of respondents expressing somewhat pessimistic outlooks dropped slightly from 6% to 4%, as did those with somewhat optimistic outlooks (from 56% to 48%). Interestingly, the proportion of those in the middle with a neutral outlook remained almost unchanged. This suggests that the lions share of work is going to only a select number of companies, with most companies fairly busy and a few that are truly struggling.

A few key quotes are highlighted below.

We are seeing an uptick in orders currently awarded and expected and are maxing our capacity.

Among the bullish respondents expressing high confidence, many pointed to the activity in Brazil and the changes that have taken place. There are now a range of operators with new floating production developments including Shell, Equinor, Enauta, Karoon, and BWO, as well as Petrobras.

We are well positioned in Brazil and this will be the big market in 2020.

Brazilian offshore is increasing a lot, now lead not only by Petrobras, but also by other major operators.

Now that the FPS industry has turned the corner, we asked how the industry will change during this upswing. Now that the leading contractors are in high demand, the top response by far was closer collaboration between oil company and contractor. This has already been seen in the long-term agreement between ExxonMobil and SBM Offshore announced in September 2019.

Another sign of increasing supplier power is the expectation for more balanced contracts, which moved up from sixth place last year to the second position. With growing demand, 16% of respondents believe that new entrants will try to enter the floating production market. To cope with lack of available lease contractors, another 15% thought that there would be a shift in contracting strategy to more EPC contracts. Only 10% expected that the increased activity levels would lead to additional cost and schedule delays.

Costs typically escalate during period of high activity. This year we asked our respondents how much cost inflation they expected in the coming year. Respondents did not believe costs would increase dramatically in 2020, as it is only the beginning of the upcycle.

The largest proportion, more than 40%, felt that there would only be 5-10% growth in costs. Another 35% expected less than 5%, while 8% did not think there would be any cost inflation. Only 16% believed there would be cost inflation of 10% or more.

For the sixth year in a row, the price of oil was identified as the greatest obstacle to offshore project growth. Most respondents are concerned with the volatility in oil prices rather than the overall level.

The other top concerns remain unchanged from last year with access to finance rose in second, closely followed by political issues and more attractive investment opportunities. In addition to challenges from onshore/unconventional oil, there is a growing push for investment in renewable energy as opposed to hydrocarbons. In-line with this trend, concern over environmental regulations moved up to fifth place from sixth.

For the first time, industry capacity was included as a concern. It ranked at the same level as environmental regulations and technical challenges, with 8% of responses.

The major FPSO suppliers are becoming busy and this may result in a slowdown in new projects.

Limited available talent resources: people.

Costs remain low on the list of concerns with FPS, drilling and subsea costs in the last positions this year.

(Source: Energy Maritime Associates Global Floating Production Industry Survey)

After three years of no major capacity constraints, respondents expressed concerns in five areas: fabrication yards, offshore installation, project management, FEED engineering, and shipyards. This new ranking reflects the growing recovery as the backlog increases and companies that downsized struggle to meet this new demand.

Fabrication yards moved up from fourth position last year as orders resume at experienced yards, all of which had downsized. Similarly, offshore installation was in sixth position last year and moved up as activity has restarted. There was also concern over the lack of experienced personnel, as many have left the sector during the downturn.

Constraints in drilling and subsea remained low, reflecting substantial availability in 2020-2021. These two industries have undergone significant consolidation and although activity has picked up, there is still plenty of uncommitted capacity in the near term.

(Source: Energy Maritime Associates Global Floating Production Industry Survey)

Brazil and West Africa ranked the top two growth regions again this year, as they have been since the beginning of the FPS Market Sentiments Survey. Brazil improved its standing as Petrobras has continued ordering FPSOs and other operators are progressing new developments.

The ranking of the top seven regions remain unchanged from last year. The Mexican side of the Gulf of Mexico (GoM) remains in third place, closely followed by South America (ex-Brazil), driven by the opportunities in Guyana. Respondents remain optimistic about the US side of the GoM as well, buoyed by greenfield and brownfield deepwater developments.

FPSOs remained the clear leader as the floating production system with the most promising growth potential, according to almost one-third of respondents. FLNGs remained in second position with 21%. The outlook for production semis increased for the second year in a row and now is tied for third place alongside FSRUs. The continued interest in semis has been driven by new developments and discoveries in the GoM, Australia, and China. There was no major change for the other unit types.

The sentiment for the global FPS industry has continued to improve since 4Q 2016. However, there has been an increasing divide between the haves and have nots, with some companies struggling to manage record backlogs and others struggling to survive. Offshore development costs remain low, fueled by excess drilling and subsea capacity. However, offshore project sanctions continue to be delayed as operators cherry-pick the best opportunities in their global portfolios.

The seventh annual Global Floating Production Industry Survey, by EMA, gauges the current market sentiment as well as where the industry is heading in the future. Respondents come from a mix of oil companies, engineering firms, financial institutions, equipment providers, construction yards, and asset owners/operators. Respondents also come from a wide range of functions, including strategy/planning, sales/business development, engineering/technical, project management, and commercial/finance.

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Floating production market outlook continues to improve - Offshore Oil and Gas Magazine

HOUSTON, Jan. 23, 2020 (GLOBE NEWSWIRE) -- SAExploration Holdings, Inc. (NASDAQ: SAEX, OTCQB: SXPLW) today announced two new projects in offshore West Africa. The projects are valued at approximately $42 million in the aggregate and are scheduled to occur primarily during the 2nd quarter of 2020 and last approximately 71 days. Services to be provided will include 3D/4D data acquisition utilizing autonomous ROV-deployed nodal recording technology in water depths up to 1,700 meters.

In addition, as previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2020, SAE recently sold certain Alaska North Slope seismic library datasets to a third party and has used $14.5 million of the net proceeds of the sale to reduce indebtedness under its credit facility.

Michael Faust, Chairman, President and CEO of SAE, commented, We are very pleased to be awarded these projects, which is further evidence of our customers confidence in our ability to deliver high quality datasets in a safe and environmentally friendly manner. A high priority for us is to improve our balance sheet. The sale of non-core assets to reduce debt has been an important tool to deliver on that priority.

About SAExploration Holdings, Inc.

SAE is an international oilfield services company offering a full range of vertically-integrated seismic data acquisition, data processing and interpretation, and logistical support services throughout North America, South America, Asia Pacific, Africa and the Middle East. In addition to the acquisition of 2D, 3D, time-lapse 4D and multi-component seismic data on land, in transition zones and offshore in depths reaching 3,000 meters, SAE offers a full suite of data processing and interpretation services utilizing its proprietary, patent-protected software, and also provides in-house logistical support services, such as program design, planning and permitting, camp services and infrastructure, surveying, drilling, environmental assessment and reclamation, and community relations. SAE operates crews around the world, performing major projects for its blue-chip customer base, which includes major integrated oil companies, national oil companies and large independent oil and gas exploration companies. With its global headquarters in Houston, Texas, SAE supports its operations through a multi-national presence in the United States, United Kingdom, Canada, Peru, Colombia, Bolivia, Malaysia, and Singapore. For more information, please visit SAEs website at http://www.saexploration.com.

The information in SAEs website is not, and shall not be deemed to be, a part of this press release or incorporated in filings SAE makes with the Securities and Exchange Commission.

Forward Looking Statements

Except for statements of historical fact, the matters discussed herein are forward-looking statements within the meaning of the applicable U.S. federal securities laws. The words may, possible, estimates, expects, believes and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements, including statements regarding the possible impact of the matters summarized in this press release, may or may not be realized, and differences between estimated results and those actually realized may be material.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, risks relating to known and unknown uncertainties, including:

Each of these risks, and the known and unknown consequences of these risks, could have a material negative impact on SAE, its business and prospects. As of the date of this press release, SAE cannot make any assurances regarding the impact or outcome of these risks. Forward-looking statements reflect the views of SAE as of the date hereof. SAE does not undertake to revise these statements to reflect subsequent developments, other than in compliance with U.S. federal securities laws and SAEs determination that any such revised disclosure is necessary or advisable to do.

Contact

SAExploration Holdings, Inc.Michael FaustChief Executive Officer and President(281) 258-4400mfaust@saexploration.com

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SAExploration Announces $42 Million of New Projects in Offshore West Africa, and Reduction in Debt of $14.5 Million - Yahoo Finance